When is a note payment delinquent?

[Mike Mitchell]

I receive payments on a note which has payments due on the 1st of the month. An investor friend who holds a lot of notes claims that the payment is delinquent if not received by the 2nd. He asserts that the 10 day grace period contained in the note only concerns the 5% late fee. So when he has a mortgagor start to develop poor payment habits he has his attorney send a demand letter for past due payment, late fee and it mentions that the next payment must be made on time. So the question is, is my friend correct about the payment being delinquent on the 2nd day? I don't plan to abuse people with this, I normally don't worry about a payment until the 10 days grace period is up.